Palm Oil Import Gobbles Up N28.16 Billion In 6 Months Despite Forex Restrictions

0
WILL 2 APP ADVERTISEMENTS

Nigeria imported palm oil to the tune of N28.16 billion in the first six months of 2022 as the value of agricultural products shipped to the country maintained an upward trend. Palm oil falls under the country’s foreign exchange restrictions; it is among the 41 import items banned by the Central Bank of Nigeria (CBN) for the Forex Exchange. This implies that importers have to source foreign exchange from other channels such as the parallel market.

Data from the National Bureau of Statistics (NBS) in its ‘External Merchandise Trade Statistics Report’ for the second quarter of the year (Q2 2022) showed the figure represents a 5.2% increase on to the corresponding period of 2021 which recorded a value of N26.77 billion.

The report published on the official website of the National Bureau of Statistics further showed that palm oil imports in the second quarter of 2022 were 14.64 billion naira compared to 13.52 billion naira in the previous quarter, a increase of 8.3%. The product which was classified as “crude palm oil” was imported mainly from West Africa and Asia.

The country shipped palm oil worth 14.64 billion naira from Ivory Coast in the second quarter of 2022, while Malaysia and China provided 13.50 billion naira and 0 respectively. .02 billion naira of goods in the first quarter of 2022. In the second quarter of 2021, Africa’s largest economy imported 15.09 billion naira of palm oil from Singapore and 11.68 billion naira from India , for a total of N26.77 billion.

The NBS report further showed that Nigeria’s agricultural imports accelerated over the periods from N1,094 trillion in the first half of 2021 to N1,105 trillion in the first half of 2022, reflecting a 10% increase. Besides palm oil, Nigeria imported wheat totaling N131.54 billion in the second quarter of 2022 compared to N130.60 billion in the first quarter of 2022.

Wheat imports in the second quarter of 2022 included 70.67 billion naira and 60.87 billion naira respectively from the United States and Lithuania. The 130.6 billion naira in the first quarter of 2022 was made up of 71.56 billion naira from the United States and 59.04 billion naira from Argentina, with Nigeria seeking alternative sources to Russia and Ukraine (its traditional suppliers) who have been engaged in a severe war since February. , 2022.

Wheat supplies in the second quarter of 2021, totaling N218 billion, came mainly from the United States, Canada, Argentina and Lithuania. Frozen food products (blue whiting) were imported from Russia and the Netherlands in the second quarter of 2022 amounting to N13.39 billion and N7.31 billion respectively.

“Total imports of agricultural products imported in the second quarter of 2022 stood at 454.45 billion naira, representing 8.55% of the total imports in the second quarter of 2022. This shows an increase of 4.76% compared to the value recorded in the first quarter of 2022 (443.36 billion naira). ) and increased by 13.70% compared to the value recorded in the second quarter of 2021 (408.49 billion naira),” the BES said in its report.

Palm oil is a commodity highly sought after by manufacturing and processing companies who use it as a raw material for the production of various consumer and industrial goods.

The CEO of the Center for Promoting Private Enterprise (CPPE), Dr Muda Yusuf, said the palm oil produced in Nigeria is woefully insufficient, adding that users would pay any amount to bring in the product if it increased their margins. “When the products are expensive, it benefits the producers as they will adjust their prices to maximize their profit,” Yusuf, former chief executive of the Lagos Chamber of Commerce and Industry (LCCI) told THEWILL in a conversation. telephone.

Operator of a medium-sized palm oil processing company, Emmanuel Ebong said the BNS figures do not reflect the real value of the goods being shipped into the country. “A large amount of palm oil is smuggled across borders, especially from Cameroon and Benin Republic. It is a huge deal among river carriers that ply between Nigeria and neighboring countries. They are the true suppliers of the large manufacturing companies using the merchandise”.

The Deputy Director of Agriculture Department of the Ministry of Agriculture and Rural Development, Benard Okata, said Nigeria was spending about $500 million a year on importing oil palms to fill existing gaps. in the area.

Okata, who made the remark during the national oil palm workshop organized by Solidaridad, an international non-governmental organization in Abuja in November 2020, said Nigeria’s current local needs for palm oil are generally about three million metric tons, but is only producing about 1.02 metric tons of palm oil.

“So there is a gap,” he said. We are importing to fill this gap, and Nigeria spends about $500 million a year on this import so far,”

He recalled that the Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele, had expressed his sadness that Nigeria was still importing palm oil despite having sufficient arable land in the South-South and South-East regions of the country. to produce it.

Agriculture Coordinator, Okomu Oil Palm Company, Billy Ghansah had said on the occasion that for Nigeria to fill the existing gaps in its palm oil production, it was necessary to plant about 100,000 hectares of palm trees. oil.

Denying the claim that Asian countries have come to collect the palm seeds in Nigeria, the agriculture specialist said that the oil palm staple cultivation strategy was developed in Africa, but Nigeria does not did not take advantage of it. He said the Asians have taken over, so many believe they came to pick the seeds from here. “They didn’t,” he said, “rather they (the Asians) used what they had and improved on it.”

In addition, Sam Ogala, Senior Climate Specialist for Africa at Solidaridad, who also serves as the Country Technical Officer for Nigeria, claimed that Nigeria is not meeting its domestic demand for oil palm.

“This country spends about $500 million a year to import palm oil. It shows you the huge gap, and that’s because we’re not meeting local demand. In the early 1960s, before the oil boom, Nigeria exported oil palm, but after that oil boom, we started importing, and all forms of oil palm find their way into the Nigerian market,” he said. -he adds.

Major Palm Oil Producers in Nigeria The Nigerian states considered to be the largest palm oil producers are Akwa-Ibom, Abia, Rivers, Edo, Imo, Ondo, Bayelsa, Cross River and Delta. But state governments have not made significant efforts to maximize the potential for palm oil production in their regions.

The CBN has implemented several intervention programs aimed at boosting agricultural production for household and industrial consumption as well as for export. These include the Agricultural Credit Guarantee Fund, Commercial Agriculture Credit Scheme, N220 Billion Fund for MSMEs and Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS).

Palm oil has many uses around the world including: edible oil, biodiesel, lubricants, cosmetics and other applications – home cooking, food and beverage, oleo chemicals, personal care, food for animals and biofuel. Global palm oil production has grown rapidly since the 1990s, with plantations in Indonesia and Malaysia supplying around 85% of global trade.

Two major oil palm companies listed in Nigeria, Okomu Oil Palm Co. Plc and Presco Plc, reported impressive performance in their annual reports for the financial year 2021. Okomu increased revenue by N23.41 billion in 2020 at 37.39 billion naira, while profit after tax increased to 16.11 billion naira from 8.69 billion naira. Its assets have grown from N28.62 billion to N34 billion.

Presco Plc recorded revenue of N41.11 billion in 2021, compared to N23.89 billion in the previous period. Profit after tax rose from N5.26 billion to N19.82 billion in FY 2021, while its assets rose from N31 billion to N48 billion. The two companies operate fully integrated agribusiness facilities with a combined market capitalization of N322 billion.

Share.

About Author

Comments are closed.